GE Marketing v Emerald [2003] NSWSC 219

New South Wales Supreme Court

CITATION : GE Marketing v Emerald [2003] NSWSC 219 HEARING DATE(S) : 24/03/03 JUDGMENT DATE : 24 March 2003 JURISDICTION: Equity Division JUDGMENT OF : Master Macready at 1 DECISION : Paragraphs 19-21

CATCHWORDS : Corporations Ljaw. Application to set aside statutory demand. Whether matters sufficiently raised in affidavit filed within time. Demand set aside. No matter of principle. PARTIES : GI Marketing Services Pty Limited v Emerald Civil Engineering Pty Limited FILE NUMBER(S) : SC 6075 of 2001 COUNSEL : Mr P. Donohoe for plaintiff Mr Cancert for defendant SOLICITORS : Paul Tipper & Associates for plaintiff Lenehan & Co for defendant

- 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER MACREADY

TUESDAY 25 MARCH 2003

6075/01 - G I MARKETING SERVICES PTY LIMITED v EMERALD CIVIL ENGINEERING PTY LIMITED

JUDGMENT

1 MASTER: This is an application to set aside a statutory demand dated 29 November 2001 claiming two different amounts. The first one is said to be for professional services, being invoice number 1069, for $28,495.28. The second amount is alleged to be retention moneys under a contract for $4,107.55. 2 These retention moneys have, since the time of the issue of the demand, been paid, and $10,000 paid off the other claim. 3 The parties previously had a lump sum contract for building works. Under that contract all amounts due under the contract were paid. The present claims appear to be additional claims for other work. 4 It is said there are genuine disputes and offsetting claims in relation to the amounts claimed in the demand. The offsetting claim for damages for delay was not referred to in the affidavit filed and served within time. This raises the question of jurisdiction. There is no doubt that it is possible to supplement material filed in time by a later affidavit, and the principles in this regard have been stated by Sunberg J in Graywinter Properties Pty Limited v Gas & Fuel Corp Superannuation Fund, 21 ACSR 581 at 587: "There has been a clear dispute on the case as to whether or not, provided there has been a supporting affidavit filed within the twenty-one day period of the application, that it may be amended by allowing additional grounds raised after the twenty-one day period. In Civil Systems Pty Limited v BT Constructions Pty Limited, a decision of mine on 15 December 2000, I drew attention in paragraph 11 to the different first instance decisions to which I had been directed at that time. 5 The matter has been dealt with further by a judge of this Court and also the Full Court of Western Australia. In Process Machinery v ACN 057 260 590 (2002) NSWSC 45, Barrett J decided that a new ground could not be raised in such circumstances. At paragraph 16 and following his Honour expressed his views as follows: 'Furthermore, the applicant is confined to the grounds shown by the application and supporting affidavit filed and served within the 21 day period to which section 459G refers. This last point is important. It was recently confirmed by the Full Court of the Supreme Court of Western Australia in Energy Equity Corp Ltd v Sinedie Pty Ltd (2001) WASCA 419 (20 December 2001). Wallwork J (with whom Steytler J and Olsson AU agreed) quoted the following passage from the judgment of Perry J in D & S Group of Companies Pty Ltd v O'Connor Investments Pty Ltd (1975) 15 ACLC 1794 (in which the opening words refer to an observation of Gummow J in David Grant): 'It seems to be implicit in that observation and from the terms of 459G(3) that if an affidavit is to be used in support of the application, it must be filed within the defined period of 21 days. It seems to me then that the affidavit of Mr Savvas having been filed and served well after the expiration of the period of 21 days, insofar as it raises any ground offered in support of the application not identified in the affidavit of Mr Gerovasilis filed within time, could not be taken into account in determining h application Furthermore, David Grant is authority for the proposition that there is no ability to extend the time limit.' Wallwork J also quoted from the judgment of Mandie J in Missay Pty Ltd v Seventh Cameo Nominees Pty Ltd (In liq) (2000) VSC397: 'I think that there is another reason for refusing special leave because it seems to me that the interpretation of the Corporations Law contained in D & S Group of Companies Pty Ltd v O'Connor Investments Pty Ltd (1997) 15 ACLC 1794 at 1798 is applicable and should be followed by this Court. If a ground in support of an application to set aside a statutory demand is not identified within the period provided by the Corporations Law, then it seems to me that it cannot be relied upon out of time upon appeal.' Wallwork J's conclusion was then stated: 'In my view it now seems to be accepted that an affidavit filed outside the 21 day period which raises a new ground or grounds to set aside a statutory demand (as opposed to an affidavit which expands on grounds in an earlier affidavit which has satisfied the threshold test) cannot be used in an application of this nature. The Corporations Law operates throughout Australia and uniformity of approach is desirable.' This is consistent with the conclusion reached earlier in the same year by Wilson J of the Supreme Court of Queensland in Raffles Corporation Pty Ltd v Cech (2001) QSC 129. 'Under s 459G 'an affidavit supporting the application' must be filed within the 21 days. The affidavit must disclose facts showing a genuine dispute, but it need not go into evidence: ass Sundberg J held in Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 14 ACLC 1703, the supporting affidavit filed within the 21 days may read like a pleading. It may be supplemented in the sense that a further affidavit containing evidence proving the facts asserted in that affidavit may be filed after the 21 days. Indeed, on the hearing of the application only admissible evidence can be relied upon. However, evidence supporting some other grounds not raised in the affidavit filed within the 21 days may not be relied upon. See also Eden Bay Pty Ltd v Bennett (1997) 15 ACLC 1634. Accordingly, the present applicant may not rely on grounds not set out in the affidavit filed within the 21 days.' This raises a question about the nature and extent of definition or assertion required. In Energy Equity Corp the company sought to rely on an offsetting claim in the form of a cause of action in negligence. It was not permitted to do so because this 'was not specifically referred to in the first affidavit'. D & S Group of Companies was also a case in which a particular offsetting claim was raised for the first time after the expiration of the 21 day period. In Raffles Corporation, the company wished to argue, as part of an asserted genuine dispute, an alleged oral agreement varying the operation of a lease, an alleged termination of that lease and a calculation of interest in a way said not to be consistent with the lease terms. This was in circumstances where the affidavit dealt only with the identity of the lessor and a particular deduction of $2500 and did not foreshadow in any way the additional objections later advanced.